A Los Angeles law firm Monday sued nearly 5,000 banks and lenders in an effort to recover $3.85 billion allegedly collected unfairly by financial institutions as administrative fees during the first round of payment protection funding for small businesses.
According to the lawsuit, filed in Los Angeles federal court, thousands of financial institutions have served as go-betweens for the government and small businesses seeking loans under the coronavirus relief bill.
The complaint, which alleges unjust enrichment and unfair business practices, asks a federal court judge to rule that if a borrower was assisted by a financial services agent, that loan processor is entitled to part of the processing fee.
The firm is seeking class action status for the suit.